The long-term goal of this project is to develop highly specific immunosuppressive and anti-inflammatory drugs with fewer adverse side effects than associated with commercially available products. This proposal focuses on proprietary peptides which selectively block NFAT activation, a central transcriptional step in graft rejection, asthma, allergy, and autoimmune diseases. The peptide inhibitor is based on a sequence from the NFAT docking site for calcineurin, the protein phosphatase that activates NFAT. The inhibitor has been shown to act by competing with NFAT for binding to calcineurin. During Phase I work, optimized inhibitors of the calcineurin-NFAT interaction will be identified by testing synthetic peptides based on naturally occurring NFAT sequences, by screening a large library of random peptides generated by phage display, and by selecting peptide ligands from a combinatorial peptide library. This project will also establish critical parameters essential for designing peptide mimetic inhibitors that have commercial advantages with respect to manufacturing and delivery. The novel approach of blocking a protein-protein targeting interaction, rather than the enzymatic activity of a signaling enzyme, is likely to prove effective in other drug development strategies. PROPOSED COMMERCIAL APPLICATION Successful clinical introduction of compounds that selectively inhibit activation of the transcription factor NFAT by a non-active site mechanism will expand the application of immunosuppressive therapy to a broader range of patients and diseases. These new compounds have the potential to completely replace currently used drugs such as cyclosporin A,FK506 which are broad-spectrum and often cause nonspecific systemic side effects.